Telegraph Media Group promotes Will Lewis and Tony Gallagher

Telegraph Media Group editor in chief Will Lewis to launch and manage new digital division, Tony Gallagher to edit daily paper

Tony Gallagher, new editor of the Daily Telegraph, and Will Lewis, now group editor in chief and managing director of digital. Photographs: Andrew Crowley/Daily Telegraph and Philip Hollis/Rex Features

The Telegraph Media Group's editor in chief, Will Lewis, was today promoted to launch and manage a new digital division at the company, while Daily Telegraph deputy editor Tony Gallagher was promoted to editor.

Lewis will set up and run the new digital division, an "entrepreneurial unit" which will have a staff of 50 and be based in Euston, away from the company's main office in Victoria. As managing director, digital, he will also oversee TMG's existing digital businesses.

He will also remain editor in chief of the Telegraph titles and website and will continue to report to the chief executive, Murdoch MacLennan.

MacLennan said the new venture would "fast-forward to the next stage of our digital transformation" and would use the Telegraph brand to "capitalise on cutting-edge ideas, driving new revenue streams by better serving our customers".

Lewis added: "It is a tribute to our chairman, Aidan Barclay, and the Barclay family that they have invested millions of pounds in this exciting venture, which will help us rapidly expand our digital operations."

The appointment will increase speculation that Lewis will take over from MacLennan when the latter retires in the next few years.

TMG, a wholly owned subsidiary of Press Holdings, owned by Sir David and Sir Frederick Barclay, also said today its 2009 profit was expected to be ahead of its 2008 result.

Gallagher has spent much of the year editing the Daily Telegraph while Lewis went on the advanced management programme in Harvard. He joined the paper in 2006 as executive head of news from the Daily Mail. He became deputy editor in 2007.

Lewis was appointed editor of the Daily Telegraph in 2006 and then TMG editor-in-chief the following year. He joined the paper in August 2005 as business editor.

In August 2006, Lewis was promoted to the specially created role of managing director editorial.

"I am delighted that Will has taken up this vital challenge. For the last three years, he has done a first-class job editing the Daily Telegraph while successfully integrating our print and digital editorial operations. Will also orchestrated undoubtedly the biggest story of the decade: our highlighting of the systematic abuse of MPs' expenses," said MacLennan.

Earlier this year the Telegraph papers dominated the news agenda with a string of exclusives on MPs' expenses, which led to them selling more than 1 million extra copies after the story broke on 8 May.

According to one TMG source, Gallagher "made his reputation" by his marshalling of the paper's reporting resources to cover the scandal, which has led to files on several MPs' expenses claims being handed to prosecutors.

One industry source estimated that the paper gained about £6m of publicity as a result of its scoop, for which it paid £110,000 to get hold of unredacted details of MPs' expenses.

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Tony Gallagher's appointment as editor of the Daily Telegraph is analysed by the former Telegraph man, Stephen Glover, in today's Independent. In his view, the ex-Daily Mail executive is a good news man but lacks "much hinterland or a world view" and "for this reason he was not marked out for the highest office at the Mail."